• Extending smart sensing capabilities through M&A
• Brings specialised machine learning technology for automated quality control
• Good strategic fit adding new niche market strength in smart manufacturing

1st November 2023 - Oxford Metrics plc (LSE: OMG), the smart sensing software company, servicing life sciences, entertainment and engineering markets, today announces it has entered into an agreement to acquire Industrial Vision Systems Ltd (“IVS”®), specialists in developing machine vision software and technology for high precision, automated quality control systems used across numerous industries. The consideration of £8.1m is to be funded with existing cash resources and new ordinary Oxford Metrics shares.

Based in Oxfordshire, IVS’ innovative machine vision systems are used globally in automated production processes for high precision quality control, inspection, guidance, identification, measurement, tracking and counting. Its highly accurate, non-contact vision systems provide well-known brands with quality control which ultimately lowers costs, improves brand reputation, competitiveness and increases safety.

Imogen Moorhouse, CEO of Oxford Metrics, commented: “Today’s announcement strengthens our sense, analyse and apply strategy. Through its cutting-edge machine vision solutions, IVS replaces traditional inspection methods with smart sensing. This results in faster, more reliable, and highly accurate results, providing well-known brands with the latest machine vision automation.  

“I am delighted to welcome IVS to Oxford Metrics. With more and more manufacturers demanding this innovation to revolutionise processes, ensure quality products and provide more efficient, error-proof production, we are excited about the opportunity ahead to extend into yet more applications and industries as inspection automation becomes more mainstream and smart manufacturing becomes the standard.”

Co-founders Earl Yardley and Andrew Waller, Industrial Vision Systems, said: “Oxford Metrics is the only home we considered because it shares our company culture and values and has a proven track record of taking great technology forward by nurturing and developing it. We are on a mission to make companies more efficient, highly flexible and quicker with our machine solutions. As part of Oxford Metrics, we will continue to develop and broaden our technology offering with an ongoing focus on innovation and research & development.”

Acquisition Highlights

• A good strategic fit - meeting our acquisition criteria: the acquisition adds IP rich, hard-to-replicate vision software and machine technology, with over 23 years of experience in smart vision technology.
• Bringing specialised machine learning AI technology: artificial intelligence deep learning vision systems spot patterns and anomalies in real-time manufacturing quality control, ensuring precise and repeatable solutions that continuously learn based on image data.
• New niche market strength enabling smart manufacturing in a wide variety of use cases: replacing the need for human inspection with more reliable, highly accurate inspection results, smart sensing is enabling smart manufacturing including static, non-contact inspections for contact lenses, pharmaceutical and automotive production, and production quality, and is playing an important role detecting and verifying errors, defects, contaminants and other irregularities.
• An impressive client roster, trusted by blue-chip manufacturing companies: adding new customers from highly regulated markets, including medical device and pharmaceutical manufacturers, leveraging our heritage in the Life Sciences market.
• An able management team established and led by founders: Earl Yardley and Andrew Waller will continue to lead the business following the acquisition.
• Expanding market opportunities in smart sensing: by leveraging the Group’s platform, IVS will have the access, expertise and resources to scale. There are clear opportunities to expand its geographic footprint and grow its IP-rich static technology offering with prospects to benefit from Vicon’s dynamic sensing.
• Attractive financial profile: The business has a profitable track record over the past five years, driven by an average annual growth rate in revenues of 6%. In the year ended 28^th February 2023 the business reported unaudited revenues of £3.4m and an EBIT of £0.8m. Trading over the past six months is consistent with delivering a further improvement in performance. The acquisition is expected to be immediately EPS enhancing.

Transaction structure and issue of shares

The acquisition consideration is £8.1m and is subject to customary adjustments for working capital, cash and debt-like items. The consideration is to be funded in cash from existing resources and the issue of 1,006,859 new Oxford Metrics ordinary shares calculated based on the average closing price over the 30-day trading period between 15^th September 2023 and 26^th October 2023 of 86.63p. Application has been made for these new ordinary shares, to be admitted to trading on AIM, with admission expected to become effective on 6^th November 2023.

Following the issue and allotment of these new ordinary shares as described above, the Company will have 131,427,135 ordinary shares in issue. No shares are held in treasury.

The information contained within this announcement is deemed to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014. Upon this announcement's publication, this inside information is now considered in the public domain.

Further information on Industrial Vision Systems – bringing smart sensing to smart manufacturing

IVS’ innovative machine vision systems are used globally in automated production processes for high precision quality control, inspection, guidance, identification, measurement, tracking and counting. Its highly accurate, non-contact vision systems provide well-known brands with quality control which ultimately lowers costs, improves brand reputation, competitiveness and increases safety. Founded in 2000 and located at the Harwell Science and Innovation Campus - Oxfordshire.

Based on the very latest digital camera technology with embedded software, its cost effective, easy to set up vision systems enable rapid integration and standardisation through seamless factory automation. IVS invests in long-term partnerships with its customers, supplying comprehensive support packages with its deployed smart systems including customer service, technical support, and training packages. It is trusted by blue-chip manufacturing companies across the globe including BD, DePuy, Jaguar Land Rover, Johnson & Johnson, Zytronic and Alkegen.

Manufacturers today are increasingly turning to smart sensing machine vision technology to ensure “right first time” products, to automate complex or mundane visual inspection tasks. The Group sees opportunities for applications to be used across even more use cases and industries than today, which currently span: medical; orthopaedics; pharmaceutical; automotive inspection for mass production; electronics and food packaging.

The majority of IVS revenue today is derived from UK/Ireland. As part of a larger group, IVS will have access, advice and the resources to scale. It will be able to expand its geographic footprint and grow its IP rich static technology offering with opportunities to benefit from Vicon’s dynamic sensing and further strengthen its already strong position through focused investment in research and development.

IVS is a member of the British Standards Institute, CE Marking Association and the Processing & Packaging Machinery Association, in addition to being an accredited member of the SafeContractor scheme. IVS’ vision solutions are FDA and GAMP (Good Automated Manufacturing Practice) compliant. For more information, visit www.industrialvision.co.uk

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